Even the Rich Can't Retire When They Planned to Anymore

Older man with billsThe long recession and slow recovery in the economy have forced millions of Americans to give up their dreams of retiring at the traditional age of 65, with many now expecting to work until they're 80 or older. That's not surprising, especially given that fewer than half of all Americans have managed to save even $25,000 in retirement savings.

What's more surprising, though, is that even among those who have quite a bit more money stashed away for retirement, the majority have started accepting the reality that they'll need to work longer. A recent survey from Bank of America's (BAC) Merrill Edge shows how big a challenge retirement finances are even among the better-off.

Reining In Expectations

Even with investment accounts having recovered much of their lost ground, so-called "mass affluent" people with between $50,000 and $250,000 to invest don't think they have enough to retire when they had originally planned to. Of those surveyed, 56% said that they expect to retire later now than they thought a year ago, with only 7% expecting to retire earlier. That's a big shift even from a couple of years ago, when only 42% were revising their retirement age upward.

The things that wealthier Americans are worrying about mirror the concerns of the overall population. Affordable health care remains the primary concern, as costs continue to move higher. With other surveys estimating that the typical retiree will spend $240,000 on health care over the course of his or her retirement for out-of-pocket costs, that concern is quite justified. Few have the financial resources necessary to fund potential health care needs as well as other basic necessities, let alone the lifestyle they'd prefer to lead after they leave their careers for good.

Other concerns have some retirement savers feeling out of control of their destiny. Three-quarters of those surveyed say that they worry about the potential effect of the economy on their retirement prospects, while almost as many focus on the need to make their retirement assets last throughout their lifetime.

Taking Control

From a personal finance standpoint, the good news is that Americans of means aren't content to sit idly by and hope for the best. Rather, they're taking steps to boost their personal accountability by managing their investments more actively. The survey found that by taking responsibility for planning as well as setting up rainy-day funds for unexpected financial expenses and getting their debt levels down, the mass affluent are confident they can get the job done.

Three-quarters of those surveyed want guidance for their finances. Although many seek expertise for basic tasks like allocating their portfolio or building a financial plan, others look for advice on discrete tasks like moving 401(k) balances from an old employer to a new investment account. Yet nearly half of those surveyed don't look for advice specifically about their investments, due largely to their wanting not to give up control of their portfolios to a broker or financial advisor. Cost savings is also a factor, as many correctly believe that they're better able to steer their money toward lower-cost investments themselves than if they used a broker.

Of course, Merrill Edge has a horse in the race. As a broker serving self-directed investors, it seeks to provide help with retirement investments. Yet regardless of which source of financial information you use, the key to long-term success is getting the up-front training you need in order to get up to speed. Then, you can work independently to strive toward becoming a better investor.

Be Smart With Your Money

Going beyond the survey, one of the biggest assets you have on your side is your ability to remain flexible. The idea that you have to retire at a certain age is an outdated concept, especially given the near impossibility of guaranteeing that you'll be able to hold a job as long as you want. With the radical changes in the labor market and economic conditions, any financial plan that requires you to work until a certain age has fundamental flaws that could blossom into huge problems.

The better approach is to acknowledge that you can't plan for every contingency but to do as much as you can to reduce your financial risk level. That way, you'll be better able to handle whatever gets thrown your way.

For more on retiring smarter:

Motley Fool contributor Dan Caplinger hopes to retire when he wants. You can follow him on Twitter @DanCaplinger. The Motley Fool owns shares of Bank of America.

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U Best Leave NYC 2day and find another home.
That’s why Gymmy is at the North Pole.
E-Trade Bankrupt
Wells Fargo Bankrupt
BP Bankrupt
Fidelity under siege and Daarck Knight slaps his anell mustard and lumber all over the Fidelity Kuntz faces and their worthless daughters who ask 4 more and LUV 2 RIDE.
And Daarck Knight shoves hiz dry lumber UP the azzes of EVERY cox sucker at Fidelity and their worthless sons who swallow and gargle with hiz anell mustard.
Have U studied your Koranie and Bowed 2 Mohammed jujubeeeeeeeeeeeeeeees 2 Day?
sniff sniff

November 19 2012 at 10:56 AM Report abuse -1 rate up rate down Reply
1 reply to GymmyKramir's comment

What are you babbling about?

December 15 2013 at 3:51 PM Report abuse rate up rate down Reply

The media is owned, operated and made to sustain the rich. Utter BS that the wealthy are having trouble retiring. Thats a middle class problem only, the media is going to try to convince us that all americans are in dire straits when the truth is its just the middle class and poor that cant make it. The wealthy think if your not rich,then you didnt sacrifice enough to get there. Its all your fault you are not rich so quit complaining. In the meantime they are lining up for another tax cut so they can invest more money in china.

November 19 2012 at 10:08 AM Report abuse rate up rate down Reply

Don't tax anyone.. Just think of that for a minute. What govt benifits can you get along without? Roads, police, fireman, water fishing hunting it goes on and on. Remember no taxes to pay for these...

November 19 2012 at 9:29 AM Report abuse rate up rate down Reply

They worked hard and became successful. TAX them more - how dare they become rich. They just build things to hire people - how dare they work hard to help others. People - do not go to high school or college - you might become rich. And, whatever you do, don't build anything - the big O will tax you to give you money away. I never thought our country would ever come to hating the successful. This is nuts.

November 19 2012 at 12:04 AM Report abuse +1 rate up rate down Reply
1 reply to kentusm's comment

Most of the top 1% got their money the old fashion way , they inherited it. The Koch Brothers and Donald Trump are prime examples of this.

December 15 2013 at 3:54 PM Report abuse rate up rate down Reply
Im ShopRat25

Well I for one don't feel bad for the rich.
They could care less about anyone or anything but themselves.

November 18 2012 at 10:33 PM Report abuse rate up rate down Reply
1 reply to Im ShopRat25's comment

It is stupid to generalize about people.

November 18 2012 at 11:19 PM Report abuse rate up rate down Reply
Im ShopRat25

What a load of crap !!!!

November 18 2012 at 10:31 PM Report abuse rate up rate down Reply

The powerball is up to $250 Million ! Buy about 250,000 tickets and maybe you will get lucky.

November 18 2012 at 8:23 PM Report abuse rate up rate down Reply

The Obama economy will push us all into food stamps and cat food but somehow people will still support him. As John Lennon wrote" living is easy with eyes closed,misunderstanding all you see......strawberry fields forever."

November 18 2012 at 4:38 PM Report abuse +2 rate up rate down Reply
1 reply to monza866's comment

It is the Republicans who want to take away your Social Security and Medicare and have you eating cat food. But fear not, without adequate health care you won't live long enough that you will notice.

November 18 2012 at 11:56 PM Report abuse -1 rate up rate down Reply


I mean Red.

November 18 2012 at 2:56 PM Report abuse -4 rate up rate down Reply


I mean Red.
Red is the Communist's party's color, if you don't.

November 18 2012 at 2:56 PM Report abuse -1 rate up rate down Reply
1 reply to Somey's comment

That is why the Dems refused it. .............................. too close to home.

November 18 2012 at 10:05 PM Report abuse +1 rate up rate down Reply